On the Move: The Neoliberalization of US Public Transportation

Farmer, Stephanie, Harvard International Review

The possibilities for constructing environmentally sustainable public transit infrastructure in the United States are strongly shaped by the logic and policies of neoliberalism. In brief, neoliberal ideology advocates for the extension of market-based principles in the arena of the state in order to "liberate" both public services from so-called state inefficiencies and capital "squandered" by taxation that could be more profitably deployed by private actors. Accordingly, neoliberal governance frameworks promote fiscal austerity and market discipline over the state. These are usually achieved by policy mechanisms such as minimizing taxes and increasing user fees; devolving public service planning and financing responsibilities from the federal government to localities; shrinking or dismantling public services; and subjecting public services to the control of markets through public-private partnerships or full privatization. The ways in which neoliberal policies shape public transit infrastructure investment today will define the environmental and political constraints future generations will have to confront in their efforts to build a more environmentally sustainable and efficient urban landscape.

History of State Transit Infrastructure Projects

State support for public transportation dovetailed with the wider Keynesian project to build a social welfare state. Before the 1950s, the majority of transit systems in the United States were privately owned and operated. Profitability in the mass transit sector collapsed by the 1940s due to redundant lines, high fixed capital costs, and decline in demand. Riders pressured municipalities to takeover the failing transit systems. By the 1950s, most of the mass transit systems throughout the United States were transformed from private enterprises to public operations. Because the systems experienced a long period of disinvestment by private operators, mayors and downtown commercial interests lobbied the federal government to provide aid for urban mass transit capital projects. The Urban Mass Transportation Act of 1964, as part of President Lyndon Johnson's comprehensive urban redevelopment initiative, significantly expanded federal funding for mass transit capital projects. Despite President Richard Nixon's hostility to urban problems, he authorized the Urban Mass Transportation Assistance Act of 1970, providing the largest capital grants yet for new construction projects. More significantly, after the Oil Shock of 1973, Nixon signed the 1974 Federal Mass Transportation Act, providing a subsidy for daily operations expenses.

Neoliberal transportation policies gained prominence under President Ronald Reagan. Underpinning Reagan's urban policy was the belief that Keynesian programs over-extended the role of the federal government by getting involved in local service provision--a role previously performed by states. The Reagan Administration singled out mass transit as a prime example of federal government overreach and began the process of devolving transit financial responsibilities back to the states and municipalities. The New Federalist position advanced by Reagan neglected the role of transit in contributing to the overall health of the national economy and national goals of reducing pollution, energy efficiency, and ameliorating poverty.

There are three main ways neoliberal policy reshaped federal transit support. First, under both the Reagan and Bush Administrations, revenues for transit were significantly reduced. In the late 1970s to early 1980s, transit and rail received 40 percent of total federal transport spending, dropping to under 25 percent by the mid-1980s and has fallen as low as 15 percent since. Second, the Intermodal Surface Transportation Efficiency Act of 1991 converted mass transit funding into block grants that allowed states the flexibility to distribute funds dedicated for urban mass transit to other transportation modes and to rural and suburban areas, thus spreading the declining revenue sources even thinner. …

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